What is CRR rate?

CRR(Cash reserve ratio) or the portion of deposits the banks have to keep with the Reserve Bank of India (RBI).

Indian banks are required to hold a certain proportion of their deposits as cash. In reality they don’t hold these as cash with themselves, but with Reserve Bank of India (RBI), which is as good as holding cash. This ratio (what part of the total deposits is to be held as cash) is stipulated by the RBI and is known as the CRR, the cash reserve ratio.